Inflation, as measured by the year over year percentage change
in the Consumer Price Index, accelerated in France and Germany in March
as can be seen in the first chart.

Inflation in Germany increased to 1.21% in March, up from
0.47% in February. The sharp increase was due largely to the rise in
energy and fresh food prices. "Core" inflation, which excludes these
items, rose 0.85% in March compared with a rise of 0.57% in February.
The March rise in Core inflation was surprising and somewhat worrisome
in view of its generally downward trend since July, 2008 when it
reached 3.54%. Overall and core inflation for Germany are shown in the
second chart.

Inflation in France rose 1.58% in March, compared with a 1.28%
in February. "Core" inflation in France, however, declined from 1.85%
in February to 1.68% in March in contrast to Germany's rise. France
publishes a seasonally adjusted "underlying index", ISJ (Index Sous
Jacent) that excludes the prices of fresh products, energy, tobacco and
public service tariffs. Core inflation in France has tended to be some
100 basis points higher than that in Germany, as can be seen in the
following table. Overall and core inflation in France are shown in the
second chart.